Moon trip canceled: rerouting to Mars.
This week, I’m taking a look at Tesla’s decision to invest monumentally in Bitcoin. What does it mean for Bitcoin and cryptocurrency at large? Who will be the next big name in Bitcoin? Read on to find out. But first, CoinFlip has an announcement to make.
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Crypto Made Convenient | CoinFlip x Coinmap
CoinFlip is excited to announce it is partnering with Coinmap.org, a nonprofit organization founded in 2013 to connect people with cryptocurrency services in their communities and worldwide.
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To learn more about this partnership, check out our latest blog post announcing the partnership.
Moon trip canceled, rerouting to Mars.
After years of flirting with crypto on Twitter, Elon Musk has finally made a move. On Monday, Tesla, the electric car manufacturer led by Musk, said in a filing with the SEC that it has purchased $1.5 billion worth of bitcoin and will begin accepting the cryptocurrency as payment.
Not to say I called it (because I just said ‘never say never’), but in a December edition of the Flip Thru, I shared this Twitter exchange between Musk and Michael Saylor, Bitcoin enthusiast and CEO of Microstrategy, and pondered whether Tesla would be the next big corporation to add BTC to its balance sheet. It looks like my optimism served me right in this case.
In January, Tesla updated its investment policy to allow it to buy digital assets. Now, it has a $1.5 billion stake in BTC, which makes up about 8% of its most recent cash reserves. In the filing, Tesla said its investment in Bitcoin was made with the intention of more flexibility to diversify further and maximize returns on cash.
In addition to being the CEO of Tesla, Musk is also the CEO of SpaceX, an aerospace manufacturer, and space transportation services company. SpaceX’s vision is to one day enable the colonization of Mars. With this information in mind, we have officially decided to cancel BTC’s trip to the Moon and have rerouted for Mars.
If you’re listening, Elon, take this as our proposal to be the official Bitcoin ATM operator of Mars.
How is Bitcoin taking the news?
After Tesla’s announcement, Bitcoin surged to a series of new all-time highs, even breaching $48,000 on Wednesday. This news comes as no surprise, of course, because Tesla is one of the world’s biggest companies. Its hefty investment validates Bitcoin as a strong and valuable asset. At the same time, the decision to accept BTC as payment legitimizes it as a currency.
So, where will be the next stop on Bitcoin’s journey to Mars? I speculate that $50k is coming soon as more institutions, corporations, and individuals begin to emulate the behaviors of the world’s richest man. Scott Minerd, CEO of the multi-billion-dollar investment giant Guggenheim Partners, told CNN he predicts BTC could climb as high as $600,000 per coin.
With all this hype, it is undoubtedly an exciting time to be a part of the Bitcoin industry. However, for popular cryptocurrency exchanges, perhaps a bit too exciting. Some of the biggest exchanges reported experiencing technical issues on Monday after Tesla’s announcement.
This is your weekly reminder that CoinFlip doesn’t experience these kinds of technical difficulties. We are always available for the purchase of Bitcoin and other cryptocurrencies with cash, card, or bank transfer. That’s a promise.
Find your closest Bitcoin ATM to get in on the Bitcoin frenzy.
Cryptomarkets are looking up
It is not just Bitcoin that is benefiting from Tesla’s decision; the crypto markets as a whole are looking up. The latest surge in value has taken cryptocurrency market capitalization above $1 trillion for the first time.
Ether continues to achieve new all-time-highs, breaking through $1,800 on Tuesday. LINK also hit a new ATH, breaching $28 on Wednesday. Binance Coin, too, reached new highs on Wednesday, briefly breaching $148.27. But, you can’t talk about all the crypto market hype without talking about DOGE.
What started as a meme coin has sent the internet into a frenzy after those participating in the GameStop stock market phenomenon blasted support of Dogecoin around the internet. The craze has led to an increase of +137.10% over the last week for DOGE, launching DOGE to the top ten list by market capitalization for the first time.
Elon Musk himself has been very vocal about Dogecoin on Twitter. One Twitter user hypothesizes that the motivation behind Elon’s DOGE tweets comes from his unbridled excitement about Tesla’s BTC investment paired with his inability to post about it before the announcement went live.
In a hilarious relevant move, so has Snoop Dogg. And, we can’t forget KISS frontman Gene Simmon’s Twitter support of DOGE. Mainly because it all culminated into this entertaining tweet from Musk:
Would you trade your BTC for a Tesla?
Due to Tesla’s early decisions to abandon car dealerships and sell direct to customers, the decision to accept Bitcoin for payment is easier than it would be for other car manufacturers since all transactions take place online. But, despite this, the announcement has many asking questions. Namely, will people want to give up their increasingly scarce coins to buy a new car? We know that many see Bitcoin as a hedge against inflation, making sense for those that prefer HODLing.
There is on-chain evidence to back up the HODLing claim. Data from blockchain research firm Chanalysis showed that only 1.3% of economic transactions came from merchants in the first four months of 2019. Things have changed considerably since that time, so I am curious to see how Tesla’s decision plays out.
Another challenge to this decision is Bitcoin’s price volatility. BTC’s price is subject to drastic price change. Trading your BTC for a new Tesla could mean that you either get a great deal on the car if the BTC price dips. On the other hand, you could end up spending way more than a Tesla’s market value if the price triples — which it totally could. In the last year alone, Bitcoin’s value has increased by 343.4%.
Who is next?
Will Tesla’s move into Bitcoin pave the way for more big corporations to add BTC to their balance sheet? I think so. But who will be next? The news has brought on much speculation as to what companies will follow Tesla’s lead.
Some say it will be Apple. If Apple were to make such a move, it would probably look a little different. Apple could incorporate crypto by making it easier for its1.4 billion users to buy and sell through the Apple wallet. If that happens, then Apple would be the U.S.’s global leader in cryptocurrency. Due to their influence over regulators, such a decision could be good news for crypto, making it less likely for the government to enforce drastic new rules.
Others are looking to the IT giant Oracle Corporation to make the next big move. Perhaps because Oracle’s CEO Larry Ellison is on Tesla’s Board of Directors, meaning that he approved the company’s investment decision.
The most likely candidate for big bitcoin investment appears to be Twitter. Twitter CFO Ned Segal told CNBC on Wednesday that the company is considering whether it should add BTC to its balance sheet. Twitter’s sister company Square is already an investor in Bitcoin, purchasing $50 million worth of BTC In October 2020.
CoinFlip in the News
- Elon Musk may have hurt bitcoin more than he helped it — Payments Source
- Elon’s Big Bitcoin Bet: What Does Tesla’s BTC Purchase Mean for Crypto? — Finance Magnates
